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Estimated machine hours of molding department = 2,500
Estimated variable manufacturing overhead per machine hour of molding department = $1.40
Estimated Total fixed manufacturing overhead of molding department = $10,000
Predetermined overhead rate for molding department = Estimated variable manufacturing overhead per machine hour of molding department + Estimated Total fixed manufacturing overhead of molding department/ Estimated machine hours of molding department
= 1.40+ 10,000/2,500
= 1.40+4
= $5.40 per machine hour
Estimated machine hours of fabrication department = 1,500
Estimated variable manufacturing overhead per machine hour of fabrication department = $2.20
Estimated Total fixed manufacturing overhead of fabrication department = $15,000
Predetermined overhead rate for fabrication department = Estimated variable manufacturing overhead per machine hour of fabrication department + Estimated Total fixed manufacturing overhead of fabrication department/ Estimated machine hours of fabrication department
= 2.20+15,000/1,500
= 2.20+10
= $12.20 per machine hour
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